Stablecoin

I am teaching monetary economics at University. One of the topics that I have covered is the bitcoin and its implication to the monetary policy. Since the bitcoin is not an ideal tool to replace the money as the tool to store the value, I don't think it could challenge the traditional role of fiat money.

What is stablecoin?

 Now, with the introduction of stablecoin, things can be a little more interesting. Compared to the bitcoin, the value of stablecoin is backed by commodities, bitcoins and fiat money. This characteristic causes the stablecoin to be more stable. However, instead of decentralised, the stablecoin is categorised as a centralised system. This might undermine its popularity among the proponents of cryptocurrencies.
 Will it challenge the dominance of fiat money? It is hard to say. But it seems to attract the attention of international organisation such as the Bank for International Settlement. In fact, Facebook cryptocurrency, Libra, is thinking of using the idea of stablecoin. In sum, its full potential should be monitor carefully.

 Click here for a BIS research paper about the challenges of stablecoin and recommendations.

 Libra could use the stablecoin concept?

Comments

Post a Comment

Popular posts from this blog

New toy and self-reflection

Went to Midvalley Megamall right after the BNM workshop last Tuesday. The initial idea was to have personal time with my wife but end up spending RM22++ to buy DJI Mavic Mini Drone (plus a memory card). 😊 That is my first drone and I have tried to learn how to use that drone as good as I can. I read the manual, tried to calibrate the drone as instructed and took a few short videos using the quick shot function. I also injured myself when tried to catch my drone when it flew toward the wall and plants. Obviously, that drone was affected by the magnetic field near my house. Lesson learned. Next target is to learn how to edit the video and hopefully can share videos in this platform. Just after having dinner today, I turned moody and start to feel miserable. I think that negative feeling is because I was trying to get a scapegoat to explain my miserable feeling. Somehow, I have realised that my unhappiness is due to my ego. Ego have prevented me to admit I am wrong. Perhaps se...
Read more

Exchange rate_lesson from Thai Baht

The appreciation of Thai Baht and its impact on the Thailand economic performance must have reminded many of us that appreciation of a currency will bring more harm to an export-oriented economy. While this claim has its merit, we shouldn't assume that a low value of the exchange rate is the solution for economic development. We must never forget that the impact of exchange rate on the economy depends on the characteristics of the economic system. A high-value currency should never undermine the export competitiveness of a country if their exports consist of high value-added or unique products More importantly, over-dependence on the low exchange rate will reduce the sense of urgent of a country to upgrade the production. The exchange rate should be market-determined and appreciation of currency should be seen as an opportunity to change the economic structure. I will elaborate more on that in the future.
Read more

Happy 2020

Happy 2020! Another year will be over in the next few hours and it is time to look forward to another year. 2019 is another fruitful year, although it could be more productive. In 2020, a brand new set of targets has been set and it is up to me to make it a reality. Of course, it is always man proposes, God disposes. So here is my 2020 wish list: 1) Be more focus in my job by practising deep work 2) Lose 5kg weight 3) Have a trip with my wife 4) Start a new research project 5) Finish reading a long-overdue book 6) Move to a new house, my first properties. :) So, what will you plan for 2020? Have a great year ahead, mates!
Read more